One of the dangerous trends happening now in India is the power of legislation being delegated and conferred on the executive, Arvind Datar, senior advocate, Supreme Court, said.
“The most dangerous thing in the GST Act is that the power to make the rules has been conferred, with retrospective effect, on the executive. It is a very very dangerous power, I don’t know what will happen if tested,” he said.
Mr. Datar was delivering the D. Rangaswamy Memorial Lecture on “The Constitutional limits on Taxation”.
No power to executive
According to Mr. Datar, the idea is that Parliament sets out the law and the executive fills the gap and implements in day-to-day administration. “But the executive does not have the power of legislation. Under GST, the executive is changing rates and increasing liability, which only a Parliament or State legislature can do,” he said.
Mr. Datar pointed out that the other issue had been the overlapping of State and Central taxes.
He pointed out an example of set-top boxes, where the State levied entertainment taxes and the Centre demanded service tax and the case was pending before the Supreme Court.
Mr. Datar said another issue had been India imposing retrospective and retroactive taxes on corporate transactions, in violation of bilateral treaties with other countries, which is leading to arbitration.
N. Rangachary, former Chairman Central Board of Direct Taxes, said that India had not learnt from the past and the aggression towards taxpayers continued.
